InfuSystem Announces Operational and Financial Results for Fourth Quarter and Full Year 2023
Full Year 2023 vs. Full Year 2022:
Record Net Revenues:
Patient Services Revenue:
Adjusted EBITDA (non-GAAP):
Five Year CAGR: Net Revenues 13% and Adjusted EBITDA 10%
Fourth Quarter Overview:
-
Net revenues totaled
$31.8 million , an increase of 10% vs. prior year.-
Patient Services net revenue was
$19.2 million , an increase of 9% vs. prior year. -
Device Solutions net revenue was
$12.6 million , an increase of 13% vs. prior year.
-
Patient Services net revenue was
-
Gross profit was
$16.7 million , an increase of 8% vs. prior year. - Gross margin was 52.6%, a decrease of 1.3% vs. prior year.
-
Operating income was
$1.3 million , an increase of 21% vs. prior year. -
Net income of
$0.1 million , or$0.00 per diluted share. -
Adjusted earnings before interest, income taxes, depreciation, and amortization (“Adjusted EBITDA”) (non-GAAP) was
$6.2 million , an increase of 12% vs. prior year.
Full Year Overview:
-
Net revenues totaled
$125.8 million , an increase of 14% vs. prior year.-
Patient Services net revenue was
$76.5 million , an increase of 11% vs. prior year. -
Device Solutions net revenue was
$49.2 million , an increase of 20% vs. prior year.
-
Patient Services net revenue was
-
Gross profit was
$63.1 million , an increase of 4% vs. prior year. - Gross margin was 50.2%, a decrease of 4.9% vs. prior year.
-
Operating income was
$4.1 million , an increase of 147% vs. prior year. -
Net income of
$0.9 million , an increase of$0.9 million vs. prior year. -
Earnings per share of
$0.04 per diluted share vs.$0.00 per diluted share in the prior year. -
Adjusted EBITDA was
$22.4 million , an increase of 8% vs. prior year. -
Net cash provided by operations was
$11.2 million . -
Company liquidity totaled
$45.6 million , as ofDecember 31, 2023 .
Management Discussion
“Additionally, we continued to show strength in our core oncology business with record patient treatments resulting in solid growth of 8%, along with our wound care business increasing more than 262% driven by our leases/sales of NPWT medical equipment for the year,” continued
“As we look to 2024, we have built conservative assumptions into our full year guidance with revenue growth estimated to be in the high-single-digit range and our Adjusted EBITDA margin estimated to be in the high-teens, exceeding our margin of 17.8% in 2023. We will look to update and refine our guidance as we move throughout the year. Going forward, we are highly focused on operational excellence and expect to significantly expand our Adjusted EBITDA, cash flows and profitability.
2023 Fourth Quarter Financial Review
During fiscal year 2023, we reviewed our cost classifications, primarily related to our pumps, pump parts, accessories, and services that were previously classified within general and administrative expenses. Based upon this review, we concluded that certain of these costs were direct costs that were more appropriately classified as costs of revenues. As a result, we have reclassified certain of these costs within our Consolidated Statements of Operations and Comprehensive Income beginning in fiscal year 2021. These costs are now presented within costs of revenues as opposed to general and administrative expense. The reclassification did not impact revenues, operating income, net income, or earnings per share.
As a result of the costs reclassification described above, costs of revenues increased by
Net revenues for the quarter ended
Patient Services net revenue of
Device Solutions net revenue of
Gross profit for the fourth quarter of 2023 of
Patient Services gross profit was
Device Solutions gross profit during the fourth quarter of 2023 was
Selling and marketing expenses for the fourth quarter of 2023 were
General and administrative (“G&A”) expenses for the fourth quarter of 2023 were
Net income for the fourth quarter of 2023 was
Adjusted EBITDA, a non-GAAP measure, for the fourth quarter of 2023 was
Balance sheet, cash flows and liquidity
During the year ended
Capital expenditures, which include purchases of medical devices, totaled
On
Fiscal Year 2024 Guidance
The full year 2024 guidance reflects management’s current expectation for operational performance, given the current market conditions. This includes our best estimate of revenue and Adjusted EBITDA and does not include any material revenue from
Conference Call
The Company will conduct a conference call for all interested investors on
To participate in this call, please dial (833) 366-1127 or (412) 902-6773, or listen via a live webcast, which is available in the Investors section of the Company’s website at https://ir.infusystem.com/. A replay of the call will be available by visiting https://ir.infusystem.com/ for the next 90 days or by calling (877) 344-7529 or (412) 317-0088, replay access code 2665790, through
Non-GAAP Measures
This press release contains information prepared in conformity with GAAP as well as non-GAAP financial information. Non-GAAP financial measures presented in this press release include EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin and net debt. The Company believes that the non-GAAP financial measures presented in this press release provide useful information to the Company’s management, investors and other interested parties about the Company’s operating performance because they allow them to understand and compare the Company’s operating results during the current periods to the prior year periods in a more consistent manner. This non-GAAP information should be considered by the reader in addition to, but not instead of, the financial statements prepared in accordance with GAAP, and similarly titled non-GAAP measures may be calculated differently by other companies. The Company calculates those non-GAAP measures by adjusting for non-recurring or non-core items that are not part of the normal course of business. A reconciliation of those measures to the most directly comparable GAAP measures is provided in the accompanying schedule, titled "GAAP to Non-GAAP Reconciliation" below.
About
Forward-Looking Statements
The financial results in this press release reflect preliminary results, which are not final until the Company’s annual report on Form 10-K for the year ended
Additional information about
FINANCIAL TABLES FOLLOW
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) |
|||||||||||||||
|
Three Months Ended
|
|
Years Ended
|
||||||||||||
(in thousands, except share and per share data) |
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
|
|
|
|
|
|
||||||||
Net revenues |
$ |
31,771 |
|
|
$ |
28,830 |
|
|
$ |
125,785 |
|
|
$ |
109,914 |
|
Cost of revenues |
|
15,060 |
|
|
|
13,299 |
|
|
|
62,676 |
|
|
|
49,354 |
|
Gross profit |
|
16,711 |
|
|
|
15,531 |
|
|
|
63,109 |
|
|
|
60,560 |
|
|
|
|
|
|
|
|
|
||||||||
Selling, general and administrative expenses: |
|
|
|
|
|
|
|
||||||||
Amortization of intangibles |
|
247 |
|
|
|
369 |
|
|
|
990 |
|
|
|
2,494 |
|
Selling and marketing |
|
3,717 |
|
|
|
2,963 |
|
|
|
12,654 |
|
|
|
12,259 |
|
General and administrative |
|
11,497 |
|
|
|
11,170 |
|
|
|
45,377 |
|
|
|
44,153 |
|
|
|
|
|
|
|
|
|
||||||||
Total selling, general and administrative |
|
15,461 |
|
|
|
14,502 |
|
|
|
59,021 |
|
|
|
58,906 |
|
|
|
|
|
|
|
|
|
||||||||
Operating income |
|
1,250 |
|
|
|
1,029 |
|
|
|
4,088 |
|
|
|
1,654 |
|
Other expense: |
|
|
|
|
|
|
|
||||||||
Interest expense |
|
(503 |
) |
|
|
(426 |
) |
|
|
(2,170 |
) |
|
|
(1,402 |
) |
Other expense |
|
(20 |
) |
|
|
(53 |
) |
|
|
(67 |
) |
|
|
(122 |
) |
|
|
|
|
|
|
|
|
||||||||
Income before income taxes |
|
727 |
|
|
|
550 |
|
|
|
1,851 |
|
|
|
130 |
|
Provision for income taxes |
|
(655 |
) |
|
|
(443 |
) |
|
|
(979 |
) |
|
|
(112 |
) |
Net income |
$ |
72 |
|
|
$ |
107 |
|
|
$ |
872 |
|
|
$ |
18 |
|
Net income per share |
|
|
|
|
|
|
|
||||||||
Basic |
$ |
— |
|
|
$ |
0.01 |
|
|
$ |
0.04 |
|
|
$ |
— |
|
Diluted |
$ |
— |
|
|
$ |
0.01 |
|
|
$ |
0.04 |
|
|
$ |
— |
|
Weighted average shares outstanding: |
|
|
|
|
|
|
|
||||||||
Basic |
|
21,189,579 |
|
|
|
20,717,042 |
|
|
|
21,024,382 |
|
|
|
20,648,818 |
|
Diluted |
|
21,758,959 |
|
|
|
21,390,007 |
|
|
|
21,646,079 |
|
|
|
21,547,306 |
|
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS SEGMENT REPORTING (UNAUDITED) |
||||||||||||
|
|
Three Months Ended
|
|
Better/
|
||||||||
(in thousands) |
|
|
2023 |
|
|
|
2022 |
|
|
|||
|
|
|
|
|
|
|
||||||
Net revenues: |
|
|
|
|
|
|
||||||
Patient Services |
|
$ |
19,159 |
|
|
$ |
17,621 |
|
|
$ |
1,538 |
|
Device Solutions (inclusive of inter-segment revenues) |
|
|
14,284 |
|
|
|
12,822 |
|
|
|
1,462 |
|
Less: elimination of inter-segment revenues |
|
|
(1,672 |
) |
|
|
(1,613 |
) |
|
|
(59 |
) |
Total |
|
|
31,771 |
|
|
|
28,830 |
|
|
|
2,941 |
|
Gross profit (inclusive of certain inter-segment allocations) (a): |
|
|
|
|
|
|
||||||
Patient Services |
|
|
12,577 |
|
|
|
11,182 |
|
|
|
1,395 |
|
Device Solutions |
|
|
4,134 |
|
|
|
4,349 |
|
|
|
(215 |
) |
Total |
|
$ |
16,711 |
|
|
$ |
15,531 |
|
|
$ |
1,180 |
|
(a) |
Inter-segment allocations are for cleaning and repair services performed on medical equipment. |
|
|
Years Ended
|
|
Better/
|
||||||||
(in thousands) |
|
|
2023 |
|
|
|
2022 |
|
|
|||
|
|
|
|
|
|
|
||||||
Net revenues: |
|
|
|
|
|
|
||||||
Patient Services |
|
$ |
76,541 |
|
|
$ |
68,881 |
|
|
$ |
7,660 |
|
Device Solutions (inclusive of inter-segment revenues) |
|
|
55,825 |
|
|
|
47,506 |
|
|
|
8,319 |
|
Less: elimination of inter-segment revenues |
|
|
(6,581 |
) |
|
|
(6,473 |
) |
|
|
(108 |
) |
Total |
|
|
125,785 |
|
|
|
109,914 |
|
|
|
15,871 |
|
Gross profit (inclusive of certain inter-segment allocations) (a): |
|
|
|
|
|
|
||||||
Patient Services |
|
|
47,800 |
|
|
|
43,433 |
|
|
|
4,367 |
|
Device Solutions |
|
|
15,309 |
|
|
|
17,127 |
|
|
|
(1,818 |
) |
Total |
|
$ |
63,109 |
|
|
$ |
60,560 |
|
|
$ |
2,549 |
|
(a) |
Inter-segment allocations are for cleaning and repair services performed on medical equipment. |
GAAP TO NON-GAAP RECONCILIATION
(UNAUDITED)
NET INCOME TO EBITDA, ADJUSTED EBITDA, NET INCOME MARGIN AND ADJUSTED EBITDA MARGIN: |
||||||||||||||||
|
|
Three Months Ended
|
|
Years Ended
|
||||||||||||
(in thousands) |
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
|
|
|
|
|
|
|
||||||||
GAAP net income |
|
$ |
72 |
|
|
$ |
107 |
|
|
$ |
872 |
|
|
$ |
18 |
|
Adjustments: |
|
|
|
|
|
|
|
|
||||||||
Interest expense |
|
|
503 |
|
|
|
426 |
|
|
|
2,170 |
|
|
|
1,402 |
|
Income tax provision (benefit) |
|
|
655 |
|
|
|
443 |
|
|
|
979 |
|
|
|
112 |
|
Depreciation |
|
|
2,897 |
|
|
|
2,735 |
|
|
|
11,518 |
|
|
|
10,866 |
|
Amortization |
|
|
247 |
|
|
|
369 |
|
|
|
990 |
|
|
|
2,494 |
|
|
|
|
|
|
|
|
|
|
||||||||
Non-GAAP EBITDA |
|
$ |
4,374 |
|
|
$ |
4,080 |
|
|
$ |
16,529 |
|
|
$ |
14,892 |
|
|
|
|
|
|
|
|
|
|
||||||||
Stock compensation costs |
|
|
1,275 |
|
|
|
589 |
|
|
|
4,074 |
|
|
|
3,825 |
|
Medical equipment reserve (1) |
|
|
428 |
|
|
|
186 |
|
|
|
1,501 |
|
|
|
1,162 |
|
SOX readiness costs |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
110 |
|
Management reorganization/transition costs |
|
|
— |
|
|
|
577 |
|
|
|
72 |
|
|
|
633 |
|
Certain other non-recurring costs |
|
|
76 |
|
|
|
41 |
|
|
|
190 |
|
|
|
123 |
|
|
|
|
|
|
|
|
|
|
||||||||
Non-GAAP Adjusted EBITDA |
|
$ |
6,153 |
|
|
$ |
5,473 |
|
|
$ |
22,366 |
|
|
$ |
20,745 |
|
|
|
|
|
|
|
|
|
|
||||||||
GAAP Net Revenues |
|
$ |
31,771 |
|
|
$ |
28,830 |
|
|
$ |
125,785 |
|
|
$ |
109,914 |
|
Net Income Margin (2) |
|
|
0.2 |
% |
|
|
0.4 |
% |
|
|
0.7 |
% |
|
|
— |
% |
Non-GAAP Adjusted EBITDA Margin (3) |
|
|
19.4 |
% |
|
|
19.0 |
% |
|
|
17.8 |
% |
|
|
18.9 |
% |
(1) |
Amounts represent a non-cash expense (recovery) recorded to adjust the reserve for missing medical equipment and is being added back (deducted) due to its similarity to depreciation. Amounts for the prior period, which were not previously included in the calculation of Adjusted EBITDA, have been included for comparability. |
(2) |
Net Income Margin is defined as GAAP Net Income as a percentage of GAAP Net Revenues. |
(3) |
Non-GAAP Adjusted EBITDA Margin is defined as Non-GAAP Adjusted EBITDA as a percentage of GAAP Net Revenues. |
CONSOLIDATED BALANCE SHEETS (UNAUDITED) |
||||||||
|
|
As of |
||||||
(in thousands, except par value and share data) |
|
|
|
|
||||
|
|
|
|
|
||||
ASSETS |
|
|
|
|
||||
Current assets: |
|
|
|
|
||||
Cash and cash equivalents |
|
$ |
231 |
|
|
$ |
165 |
|
Accounts receivable, net |
|
|
19,830 |
|
|
|
16,871 |
|
Inventories, net |
|
|
6,402 |
|
|
|
4,821 |
|
Other current assets |
|
|
4,157 |
|
|
|
2,922 |
|
|
|
|
|
|
||||
Total current assets |
|
|
30,620 |
|
|
|
24,779 |
|
Medical equipment for sale or rental |
|
|
3,049 |
|
|
|
2,790 |
|
Medical equipment in rental service, net of accumulated depreciation |
|
|
34,928 |
|
|
|
39,450 |
|
Property & equipment, net of accumulated depreciation |
|
|
4,321 |
|
|
|
4,385 |
|
|
|
|
3,710 |
|
|
|
3,710 |
|
Intangible assets, net |
|
|
7,446 |
|
|
|
8,436 |
|
Operating lease right of use assets |
|
|
6,703 |
|
|
|
4,168 |
|
Deferred income taxes |
|
|
9,115 |
|
|
|
9,625 |
|
Derivative financial instruments |
|
|
1,442 |
|
|
|
1,965 |
|
Other assets |
|
|
1,581 |
|
|
|
80 |
|
|
|
|
|
|
||||
Total assets |
|
$ |
102,915 |
|
|
$ |
99,388 |
|
|
|
|
|
|
||||
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
||||
Current liabilities: |
|
|
|
|
||||
Accounts payable |
|
$ |
8,009 |
|
|
$ |
8,341 |
|
Other current liabilities |
|
|
7,704 |
|
|
|
6,126 |
|
|
|
|
|
|
||||
Total current liabilities |
|
|
15,713 |
|
|
|
14,467 |
|
Long-term debt, net of current portion |
|
|
29,101 |
|
|
|
33,157 |
|
Operating lease liabilities, net of current portion |
|
|
5,799 |
|
|
|
3,761 |
|
|
|
|
|
|
||||
Total liabilities |
|
|
50,613 |
|
|
|
51,385 |
|
|
|
|
|
|
||||
Stockholders’ equity: |
|
|
|
|
||||
Preferred stock, |
|
|
— |
|
|
|
— |
|
Common stock, |
|
|
2 |
|
|
|
2 |
|
Additional paid-in capital |
|
|
109,837 |
|
|
|
105,856 |
|
Accumulated other comprehensive income |
|
|
1,088 |
|
|
|
1,489 |
|
Retained deficit |
|
|
(58,625 |
) |
|
|
(59,344 |
) |
|
|
|
|
|
||||
Total stockholders’ equity |
|
|
52,302 |
|
|
|
48,003 |
|
|
|
|
|
|
||||
Total liabilities and stockholders’ equity |
|
$ |
102,915 |
|
|
$ |
99,388 |
|
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) |
||||||||
|
|
Years Ended |
||||||
(in thousands) |
|
|
2023 |
|
|
|
2022 |
|
|
|
|
|
|
||||
OPERATING ACTIVITIES |
|
|
|
|
||||
Net income |
|
$ |
872 |
|
|
$ |
18 |
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
||||
Provision for doubtful accounts |
|
|
(261 |
) |
|
|
87 |
|
Depreciation |
|
|
11,518 |
|
|
|
10,866 |
|
Loss on disposal of and reserve adjustments for medical equipment |
|
|
1,726 |
|
|
|
1,933 |
|
Gain on sale of medical equipment |
|
|
(2,887 |
) |
|
|
(2,183 |
) |
Amortization of intangible assets |
|
|
990 |
|
|
|
2,494 |
|
Amortization of deferred debt issuance costs |
|
|
120 |
|
|
|
73 |
|
Stock-based compensation |
|
|
4,074 |
|
|
|
3,825 |
|
Deferred income taxes |
|
|
633 |
|
|
|
19 |
|
Changes in assets - (increase)/decrease: |
|
|
|
|
||||
Accounts receivable |
|
|
(2,363 |
) |
|
|
(1,153 |
) |
Inventories |
|
|
(1,581 |
) |
|
|
(882 |
) |
Other current assets |
|
|
(1,235 |
) |
|
|
(387 |
) |
Other assets |
|
|
(2,798 |
) |
|
|
(135 |
) |
Changes in liabilities - increase/(decrease): |
|
|
|
|
||||
Accounts payable and other liabilities |
|
|
2,415 |
|
|
|
2,942 |
|
NET CASH PROVIDED BY OPERATING ACTIVITIES |
|
|
11,223 |
|
|
|
17,517 |
|
|
|
|
|
|
||||
INVESTING ACTIVITIES |
|
|
|
|
||||
Acquisition of business |
|
|
— |
|
|
|
— |
|
Purchase of medical equipment |
|
|
(10,093 |
) |
|
|
(14,094 |
) |
Purchase of property and equipment |
|
|
(1,024 |
) |
|
|
(982 |
) |
Proceeds from sale of medical equipment, property and equipment |
|
|
4,383 |
|
|
|
3,598 |
|
|
|
|
(6,734 |
) |
|
|
(11,478 |
) |
|
|
|
|
|
||||
FINANCING ACTIVITIES |
|
|
|
|
||||
Principal payments on long-term debt |
|
|
(55,499 |
) |
|
|
(42,035 |
) |
Cash proceeds from long-term debt |
|
|
51,552 |
|
|
|
42,022 |
|
Debt issuance costs |
|
|
(229 |
) |
|
|
— |
|
Cash payment of contingent consideration |
|
|
— |
|
|
|
(750 |
) |
Common stock repurchased as part of share repurchase program |
|
|
(153 |
) |
|
|
(5,459 |
) |
Common stock repurchased to satisfy statutory withholding on employee stock-based compensation plans |
|
|
(1,158 |
) |
|
|
(1,193 |
) |
Cash proceeds from exercise of options and ESPP |
|
|
1,064 |
|
|
|
1,355 |
|
|
|
|
(4,423 |
) |
|
|
(6,060 |
) |
|
|
|
|
|
||||
Net change in cash and cash equivalents |
|
|
66 |
|
|
|
(21 |
) |
Cash and cash equivalents, beginning of period |
|
|
165 |
|
|
|
186 |
|
Cash and cash equivalents, end of period |
|
$ |
231 |
|
|
$ |
165 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20240314773485/en/
602-889-9700
Source: